Best Hardship Loans for Bad Credit: Top Lenders and Options

BEST FOR COMPARING MULTIPLE OFFERS

Stilt offers a single loan application so you can apply for a loan with 100+ lenders without impacting your credit score.

Apply for loans in 2 mins and check your interest rate.

With Stilt, you can complete a single loan application in just two minutes and instantly check your interest rate without impacting your credit score. Whether you need a loan for debt consolidation, home improvements, or any other personal expense, Stilt offers loans ranging from $1,000 to $50,000 with repayment terms of three to seven years.

The platform partners with lenders that have flexible qualification requirements, making it possible for even those with less-than-perfect credit to secure a loan. Additionally, Stilt partners offer the convenience of next-day funding and do not charge any prepayment penalties, giving you the freedom to pay off your loan early without extra fees.

BEST OVERALL HARDSHIP LOAN FOR BAD CREDIT

Upgrade

Upgrade is a lender that provides accessible online and mobile credit and banking services. It offers personal loans to those with poor credit history. Upgrade has made more than $3 billion in credit available to over 10 million applicants since its launch in 2017 and continues to expand its online and mobile services.

Upgrade offers loan amounts ranging from $1,000 to $50,000 with two- to seven-year terms available. Although maximum APRs are on the high end compared to other online lenders, Upgrade makes loans available to those with poor credit history. Upgrade charges an origination fee between 1.85% and 9.99% of the loan, and borrowers will encounter a $10 fee if their payment is more than 15 days late or if the payment does not go through. There are no discounts for autopay. That said, Upgrade borrowers are not subject to a prepayment penalty, so you can reduce the overall cost of the loan if you’re able to pay it off early.

Upgrade streamlines the lending process with a mobile app that lets borrowers view their balance, make payments, and update personal information. Upgrade’s Credit Heath tool also makes it easy to track your credit score over the life of your loan.

Pros & Cons

Pros

• Low minimum credit score requirement
• Offers direct lender payoff for debt consolidation loans
• No income requirement

Cons

• High APR range
• Charges fees for late payments and insufficient funds
• Charges origination fees from 1.85% and 9.99%

Eligibility

Upgrade has a minimum credit score requirement of 580, and there is no minimum income requirement. Co-applicants are permitted. However, Upgrade’s personal loans come with a unique feature—mandatory automatic payments. While this is an effective default prevention measure, it might not suit everyone, especially those with irregular income streams.

In summary, Upgrade offers personal loans for those with poor credit history. Although its maximum APRs are on the high end compared to other online lenders, Upgrade makes loans available to those with poor credit history. Upgrade charges an origination fee between 1.85% and 9.99% of the loan, and borrowers will encounter a $10 fee if their payment is more than 15 days late or if the payment does not go through. Upgrade streamlines the lending process with a mobile app that lets borrowers view their balance, make payments, and update personal information. Upgrade’s Credit Heath tool also makes it easy to track your credit score over the life of your loan.

BEST FOR A RANGE OF REPAYMENT OPTIONS

Avant

Avant, a consumer lending platform established in 2012 and headquartered in Chicago, provides secured and unsecured personal loans through WebBank, a third-party bank. Unsecured loans are accessible in all states except Hawaii, Iowa, New York, Vermont, West Virginia, and Maine, as well as in Washington, D.C. Avant caters to middle-income borrowers with fair to good credit , requiring a minimum credit score of 580 to qualify.

While Avant's maximum loan amounts may be relatively low compared to other lenders, the platform offers flexible repayment terms, spanning from two to five years, making it a viable option for borrowers. However, it's important to note that Avant's APR range of 9.95% to 35.99% is relatively high for applicants with a good to excellent credit score , and it does not offer an autopay discount. Additionally, an administrative fee of up to 4.75% of the loan amount is charged.

Pros and cons of Avant's offerings include:

• Secured and unsecured loan options available
• Low credit score requirement of 580
• Loan terms available for up to 60 months
• Imposition of an upfront administrative fee
• High starting APR for prime borrowers
• Co-signers and co-applicants are not allowed

Regarding eligibility, Avant requires a minimum credit score of 580 and a minimum income of $20,000. The platform does not permit co-signers or co-borrowers. Avant's loans can be utilized for debt consolidation, large expenses, and home projects.

BEST FOR QUICK APPROVALS

Upstart

Upstart is a popular online lender that has gained popularity in the personal loan space due to its artificial intelligence- and machine learning-based approach to borrower qualification. Upstart's AI-based underwriting model allows it to approve 27% more borrowers than possible under a traditional lending model, making it a great option for borrowers who may not qualify for loans from other lenders.

Upstart's minimum credit score requirement is 300, making it accessible to borrowers with fair credit. Loan amounts range from $1,000 to $50,000, and loan term lengths available are three- or five-year. Upstart's APRs are competitive, but it may not be the best option for borrowers who can qualify for more competitive rates .

Upstart offers flexible loan options, allowing borrowers to choose a custom payment date. Funding can be as soon as one business day, making it a great option for those in need of quick funding . However, Upstart charges an origination fee up to 12% of the loan amount, which is higher than some other lenders. Late fees or statement fees may also apply.

Upstart does not permit co-signers or co-borrowers, but it does offer prequalification with a soft credit check. To qualify for a loan, you must have a source of income, a personal bank account, an email address, and a Social Security number. Upstart is available in every state except West Virginia and Iowa, making it widely available.

Pros

• Accessible to borrowers with no credit history
• Prequalification with a soft credit check
• Ability to choose a custom payment date
• Quick funding, with funding as soon as one business day

Cons

• Charges an origination fee up to 12% of the loan amount
• Only offers three- or five-year terms
• No co-signer option

In summary, Upstart is a great option for borrowers who need quick approvals and flexible loan options. Its AI-based underwriting model allows it to approve more borrowers than traditional lenders, and its minimum credit score requirement of 300 makes it accessible to borrowers with fair credit. However, Upstart charges an origination fee up to 12% of the loan amount and only offers three- or five-year terms.

BEST FOR FAST FUNDING & BELOW-AVERAGE CREDIT

LendingPoint

LendingPoint is an Atlanta-based online lender offering personal loans to individuals in 48 states and Washington D.C., with the exception of Nevada and West Virginia. The platform provides quick funding, making it an attractive option for those in need of fast access to funds.

Loan Details

• APR Range: 7.99% to 35.99% with autopay
• Loan Amount: Ranges from $2,000 to $36,500 (minimum of $3,500 for Georgia residents)
• Repayment Terms: 24 to 72 months

Pros & Cons

Pros:

• Quick funding
• Low credit score requirements
• No prepayment penalty

Cons:

• High maximum APRs
• Origination fee up to 10%
• Not available in Nevada and West Virginia
• Co-signers or joint loans not permitted

Eligibility

• Minimum Credit Score: 600
• Minimum Annual Income: $35,000
• Co-signers: Not permitted

BEST FOR ONLINE EXPERIENCE

LendingClub

If you're looking for an online lender with a strong reputation, LendingClub is a great option. Founded in 2007, LendingClub is the largest online lending platform for personal loans in the United States. With over 3 million customers and more than $55 billion in loans funded, LendingClub is a trusted choice for borrowers.

One of the benefits of using LendingClub is the ability to borrow up to $40,000, which is a higher maximum loan cap than some other lenders. However, keep in mind that LendingClub's loan terms are limited to two to five years, which is less flexible than other lenders on our list. Additionally, borrowers are charged an origination fee between 3% to 8% of the total loan amount, which is taken from the loan proceeds at funding.

LendingClub doesn't offer an autopay discount, but it does provide a balance transfer loan that makes debt consolidation easier. With this type of loan, LendingClub offers direct payment to third-party lenders, including over 1,700 creditors. You can choose exactly how much of your new loan amount you want LendingClub to pay toward each creditor, and the platform takes care of payments for you.

LendingClub is available to borrowers with fair to excellent credit, with a minimum credit score of 600 and a minimum credit history of three years. Co-applicants are also permitted, which can increase your chances of being approved for a loan.

Here's a breakdown of the pros and cons of using LendingClub:

Pros

• Will directly pay off third-party creditors as part of balance transfer loan
• Co-applicants permitted
• Available to borrowers with fair to excellent credit

Cons

• Origination and late fees
• Limited loan term availability
• High APR range

Overall, LendingClub is a solid choice for borrowers who want a simple, streamlined online lending experience. While the APR range is high and there's no autopay discount, the ability to borrow up to $40,000 and the balance transfer loan option make LendingClub a competitive option in the online lending space.

BEST FOR PEER-TO-PEER LENDING

Prosper

Prosper is a peer-to-peer lending platform established in 2005, offering a broad range of personal loan amounts from $2,000 to $50,000. It provides a prequalification process, allowing you to check your eligibility without affecting your credit score. Borrowers can access funds in as few as three days after accepting a loan offer, providing quick access to much-needed funds.

Pros & Cons

• Flexible Loan Amounts: Prosper offers a wide range of loan amounts to suit various financial needs.
• Accessible Minimum Credit Score: It has a relatively accessible minimum credit score requirement, making it available to a broader range of borrowers.
• Quick Funding: Borrowers can receive funds in as few as three days, providing fast access to capital.
• Origination and Late Fees: Prosper charges origination fees ranging from 1% to 7.99% of the total loan amount and a late fee of the greater of $15 or 5% of the unpaid loan amount.
• High Maximum APR: The platform has a high maximum APR, which may not be the most competitive in the market.

Details

• Eligibility: Prosper requires a minimum credit score of 560, with the average approved borrower having a score of 717. The platform also looks for a minimum credit history of two years, a maximum debt-to-income ratio of 50%, and an average borrower income of $89,000.
• Loan Uses: Prosper personal loans can be used for various purposes, including debt consolidation, unexpected home repairs, medical and dental expenses, and auto-related costs.

Prosper offers a convenient and accessible peer-to-peer lending option, providing a relatively quick and straightforward process for obtaining personal loans. However, it's essential to carefully consider the associated fees and APRs to determine if it aligns with your financial needs and circumstances.

Tips for Comparing Hardship Loans for Bad Credit

If you have poor credit and need to borrow money to get out of a financial bind, comparing hardship loans can help you find the most affordable loan you can qualify for with your credit profile. Here are some tips to help you compare hardship loans for bad credit:

• Review eligibility requirements. Before applying for a loan, review the eligibility requirements. Many lenders list minimum credit requirements for loans on their websites. With this information, you can develop a short list of lenders that might approve you with less-than-perfect credit.
• Check annual percentage rates (APRs). Comparing annual percentage rates (APRs) across different loans and lenders can help you find the most affordable hardship loan you can qualify for with your credit profile. An APR is what a loan costs you on an annual basis, including interest and fees.
• Dig into the fees. Some lenders charge an origination fee to process the loan, and this is a crucial cost to review across lenders. Also, look for miscellaneous fees like prepayment penalties and late fees. If you have the funds to pay your loan off ahead of schedule, you want to ensure you won’t get charged for eliminating your debt balance early.
• Compare funding times. If you need money very quickly, a lender’s application review process and funding speed are important. Some lenders may be able to approve you within minutes, and you could get funding within a few business days as long as you turn in the requested documentation right away.
• Prequalify, if you can. Prequalifying for a loan usually doesn’t involve a hard credit check, and it gives you a conditional offer on a loan. When you have bad credit, prequalifying with several lenders can show you what loans you’re eligible for and where you’ll get the best rate without impacting your credit.

In addition to these tips, you may also want to use a loan calculator to help you estimate your monthly payments and total loan costs. A loan calculator can help you compare different loan options and see how much you can afford to borrow based on your budget and financial goals. By taking the time to compare hardship loans for bad credit, you can find the best loan option for your needs and improve your financial situation.

What Is a Hardship Loan?

A hardship loan is a type of personal loan that can be utilized to address a financial shortfall or unexpected expense. In situations where unforeseen bills arise, such as emergency medical expenses or significant car repairs, a hardship loan can provide a means to manage these costs. If you are without a credit card or prefer not to use one, and your savings are insufficient to cover the entire expense, a personal loan can help spread the payments over several months or even years. By doing so, it can transform a large bill into smaller, more manageable monthly payments. It is important to note that interest will be accrued on the borrowed amount, potentially increasing the overall cost of the expense.

How Do Hardship Loans Work?

If you're in a financial bind and need money quickly, a hardship loan could be a good option for you. These personal loans typically come with fixed interest rates and monthly payments that are due until you repay the balance.

After you're approved for a hardship loan, you'll receive a lump-sum payment via direct deposit or check. You can use the funds to pay bills, catch up on rent, or handle any other financial obligations you have.

Interest rates for personal loans can go up to 36%, and having a limited credit history will likely result in high interest rates. However, applying for a loan with a co-signer who has good credit could help you get a better rate. In addition to loan interest, upfront origination fees could range from 1% to 8% of your loan amount.

Hardship Loan Cost Example

Let's say you apply for a $5,000 loan to pay a medical bill for your child. With an APR of 25% and a loan term of 24 months, your payments would be $266.86 per month, and you'd spend a total of $1,404.58 in interest over the two-year loan term. If you need lower payments, lengthening your loan term could reduce the monthly bill, but extending a loan term means you'll pay more interest overall.

When applying for a hardship loan, lenders will consider your income, minimum credit score, debt-to-income ratio, and payment history. It's important to note that if you have a poor credit history, you may not qualify for a hardship loan.

How to Apply for a Hardship Loan

If you're facing financial hardship and need a loan, applying for a hardship loan is similar to applying for any other personal loan. Here are the steps you can take to increase your chances of getting approved:

1. Check your credit report. Before applying for a hardship loan, check your credit report to ensure that it is accurate. This will also give you an idea of your credit score, which can affect your approval odds and interest rate.
2. Compare interest rates. Prequalify for loans with multiple lenders to compare costs and interest rates. This way, you can select a loan that fits your needs and budget without hurting your credit score.
3. Find a co-signer. If you have a low credit score or cannot qualify for a competitive interest rate on your own, applying with a co-signer could help you secure a lower rate.
4. Submit required financial documents. Lenders may ask for information like bank statements or pay stubs to verify your income during the loan process. Submitting these required documents quickly could expedite loan approval and funding.
5. Review and sign loan documents. Once approved, you will receive the loan contract to review and sign. This is another opportunity to ensure that loan payments fit comfortably into your monthly budget before agreeing to the loan.
6. Receive loan funds. After signing the loan documents, you will receive the loan funds. The funds may be directly deposited into your bank account or sent to you as a check.

Remember, before applying for a hardship loan, it's important to have a plan and budget in place to ensure that you can afford the loan payments. Additionally, lenders may require a social security number, a soft credit check, and proof of a minimum income requirement to determine your ability to repay the loan. By following these steps and ensuring that you meet borrower qualifications, you can increase your chances of getting approved for a hardship loan.

Pros and Cons of Hardship Loans

Pros

• Debt payments are spread out over several months or years, which can be easier on your budget.
• You can often prequalify for loans to check rates without impacting your credit.
• Lenders may let you apply for loans with a co-signer to get a better interest rate.
• Loans have a set payoff date as long as you make each payment, so you know exactly when you’ll be debt-free.

Cons

• Having bad credit can make it harder to qualify for a hardship loan.
• Interest rates for borrowers with bad credit tend to be high.
• Lenders may charge upfront origination fees.

Hardship loans can be a good option for those who need to borrow money but have damaged credit or thin credit histories. However, there are some cons to consider. Interest rates tend to be high for borrowers with bad credit, and lenders may charge upfront origination fees. Additionally, having bad credit can make it harder to qualify for a hardship loan. It's important to carefully consider the terms and conditions of any loan before signing up.

Alternatives to Hardship Loans for Poor Credit

1. Payday Alternative Loans (PALs)

Consider exploring Payday Alternative Loans (PALs) offered by federal credit unions as an alternative to costly payday loans. PALs are designed to provide quick access to funds with flexible eligibility requirements and a maximum interest rate of 28% APR. However, these loans typically offer amounts up to $2,000, which may not suffice if you require a larger sum.

2. Borrow From Friends or Family

Another option is to establish a loan arrangement with someone you know, which could help you avoid applying for a traditional bank loan. It's important to formalize the agreement by setting an interest rate and payment schedule in writing to ensure that both parties are comfortable with the terms. Once the agreement is in place, prioritize repaying the borrowed amount by the agreed-upon deadline, treating it like any other loan.

3. Ask for Bill Extensions or Payment Plans

In situations where you are struggling to keep up with bills, consider reaching out to the bill issuer as soon as possible. You may be able to negotiate a payment arrangement directly with them instead of seeking additional funds to cover the balance. Some service providers may also offer special programs for low-income households or individuals facing financial hardship, such as those impacted by job loss.

Methodology

To determine the best personal loan lenders, we reviewed 30 popular lenders based on 16 data points across five categories: application process, eligibility and accessibility, loan details, loan cost, and customer experience. We assigned weightings to each category as follows: application process (30%), eligibility and accessibility (30%), loan details (20%), loan cost (10%), and customer experience (10%).

Within each major category, we considered several characteristics, including available loan amounts, repayment terms, APR ranges, and applicable fees. We also evaluated minimum credit score requirements, whether each lender accepts co-signers or joint applications, and the geographic availability of the lender. Additionally, we assessed each provider's customer support tools, borrower perks, and features that simplify the borrowing process, such as prequalification options and mobile apps.

Partial points were awarded where appropriate, depending on how well a lender met each criterion. Based on our analysis, we recommend the top personal loan lenders that offer competitive rates, flexible repayment terms, and excellent customer support.